CLEARFIELD – The Clearfield school board on Monday night voted to approve a two-step bond refinancing proposal from PFM, the district’s financial advisor.
Jamie Doyle, PFM managing director, last week proposed it first refinance General Obligation Bonds, Series of 2016, later this year, and then its GO bonds, Series of 2017 and 2017A, in the spring.
Currently, she said interest rates are near all-time lows, and there’s not that much difference in rates in year one than in year 30. “Those are the perfect set of conditions.”
She said interest rates have come back down after spiking upward in March of 2020 when stay-at-home orders were issued and COVID-19 became a reality for the United States.
“Things calmed down thereafter,” she said, “… all-time, all-time lows were set in August of 2020 and we’re not too far from those as we speak today.”
Doyle proposed Step 1, GO Bonds Series A of 2021, be issued with a principal of $8.45 million for an estimated savings of $167,416, then Steps 2/2A, GO Bonds Series A and AA of 2022.
She proposed that Step 2 be issued with a principal of $3.125 million for an estimated savings of $85,302 and Step 2A with a principal of $3.88 million for an estimated savings of $29,883.
“We are not extending the district’s debt at all,” Doyle said. “We’re merely replacing old interest rates with new, nearly all-time low interest rates.”
With this approval, the board is now authorizing the administration to work on the refinancing with PFM, its bond counsel, Eckert Seamans Cherin & Mellott LLC and solicitor, Beard Legal Group.
Last week, Doyle said it could consider a parameters resolution in October, allowing PFM to issue the bonds, within certain parameters, like a minimum net savings.
The minimum net savings is $150,000 for Step 1 and $50,000 for Step 2, and PFM will not take part in the competitive Internet auction unless the savings targets can be satisfied.